You Own Too Much of an Employer’s Stock
Too much of any single investment can be either a recipe for building wealth, or a ticket to financial disaster. On the one hand, Apple employees who are long-term holders of their employer’s stock are probably pretty happy and may be on their way to being set for retirement.
But not everyone who loads up on company stock is so fortunate. Enron employees who were big holders of their employer’s stock saw their retirement plans wiped out when the company collapsed and the stock became worthless.
Don’t make the same mistake. When you think about the soaring highs and crashing lows that can come with a single investment, you should understand why you need to diversify your investment portfolio.